1. What do you consider the three most important ethical issues or dilemmas encountered by modern day businesses? Please explain and give examples of each. How do laws, societal changes in values and globalization present challenges for corporate business ethics? Three most important ethical issues Financial reporting Shareholders and other investors such as banks and financial institution rely on corporate disclosure of management in terms of assessing the current state of operations of a business. As investors who stake their money in the operation of the business for the hope of a gain, they have the right to know how the business fares during the past period, and how their money is being utilized to create them value.
The ethical issues arise when the operations turn sour and the management does not want to disclose the truth for the consequences that it may face. When the business turns sour, this may be a result of a number of factors: poor planning when economic factors and uncertainty impacts the business badly; incompetence of management; corruption within the organization, etc. The management, in order to protect its interests, will have to do some manipulations in the financial statements that it will disclose to shareholders in order to conceal the real performance of the business. One of the most devastating corporate scandals in relation to financial reporting is the Enron case.
When the investors learn about the real financial position of the organization, it is too late that the organization is already starting to crumble. When weaknesses and deteriorating performance could have been addresses, perhaps by appointing a more competent top management, investments could have been protected.
But because these weaknesses are not disclosed through manipulations, they are not addressed at all and shareholders are hurt. Acquisition and use of information and business intelligence In this time when the market place becomes increasingly competitive, one of the factors that can tell the success of an organization is in the usefulness of the information or business intelligence that it gets to get ahead in the competition. The use and acquisition of this kind of information bring ethical issues for consideration. Theft of trade secrets is an example of the issues in this area.
With the growing competition, there are a lot of companies that want to stay ahead in the game at the expense of their competitors are engaging with corporate espionage. Cases like the HP scandal are an example, when HP was alleged to be spying Dell in the release of its printers. Since information and trade secrets are considered competitive advantages for a player, stealing it would directly affect the course of the competition and a player’s advantage. When there is a fine line between competitive intelligence and unethical snooping and many analysts are claiming that the practice is common, it is still an ethical issue that is of much concern today in the business world. Intrusive marketing activities In some instances, marketing activities have become intrusive to some consumers.
There are marketing mediums that undermine privacy of consumers, disrespectful of their private time thus creating resentment. While corporations are forced to ensure profitability by selling their products and reach consumers, a number of ethical issues arising from deception of consumers through marketing activities have been one of my concerns. An example of this issue is the term called “SUGGING” in marketing research.
Sugging stands for “Selling in the guise of research” where individuals, instead of random respondents in order to gather appropriate statistical data, are targeted to whom a certain product will be sold. When individuals, with the knowledge that it is a legitimate research agrees to participate, he or she feels betrayed when the real purpose of the research is to induce him or her to buy a product. While he or she agrees to spend his or her time to participate in the research, he or she feels being deceived and his or her privacy is being invaded. Challenges for corporate business ethics Laws, societal changes in values, and globalization pose challenges to business ethics nowadays.
What is considered ethical in one country can no longer be considered ethical in another. Also, what maybe considered legal, but when viewed by society, represents a strong contention from the people as a highly unethical practice, corporations have to weigh the scale. On the other hand, what cannot be done in one place can be done in another place, which is deemed unethical in some situations. All these makes an ethical decision-making more complicated—making it no more hard and fast rule in coming up with a decision, but depending on the context.
These create more gray areas in the process, since the issue is acceptability in different context—which can’t be defined in a set of rules. Therefore, corporate business ethics faces more challenges in order to be observed. 2. What is the significance of the Sarbanes- Oxley Act? From your perspective what law (s) have had the greatest impact on organizational ethics?
How? Please explain. Sarbanes-Oxley and business ethics Since ethics is concerned about the interests of various stakeholders, for a corporation, one of its stakeholders is the shareholders. While management is accountable to shareholders for the health of the organization in general, in some instances such as the corporate scandals, vested interests are protected at the expense of the other—management interests at the expense of the interest of shareholders. Therefore, Sarbanes-Oxley acts as an additional force in order to ensure management practices ethical behavior in order to protect the interest of these groups. Relevant laws Labor laws Labor laws serve as guidelines on how an organization should treat employees.
While what is unethical may still be legal, and not because it is legal it is already ethical, these laws provide the minimum required behaviors as to how a company deals with employees, especially in topics like discrimination, harassment, wages and benefits, etc. Labor laws in order to ensure that the interests of employees are protected are one of the laws that have greater impact in corporate business ethics. Environmental laws Another set of laws that are relevant to business ethics is environmental laws.
In order to provide minimum ethical guidelines to businesses as to how they conduct their operations in relation to the effects in our environment, these laws are indeed important. In this set of laws, the interest of another stakeholder—the society/environment is ensured. Investment laws Where Sarbanes-Oxley is part of this set of laws, investment laws ensure that investors’ interests are taken care of. Because investments play a huge role in the operation of a business, it is only relevant to protect the investors who take the risk to fund the business, for a hope of a larger return in the future.
These funding helps more businesses to grow—provide more jobs to people, better products and services to customers, aid to improve society and civilization, etc. Thus because of the benefits of it as a whole for the society--it is only wise that these investors are protected, and incorporated in the ethical decision-making of a business. Reference List Bartol, K., Martin, D., Tein, M., & Matthews, G. (2001). Management: A Pacific Rim Focus. Australia: McGraw Hill Company. Ferrell, O.
C., Fraedrich, J., Ferrell, L. (2008). Business Ethics; Ethical Decision Making And Cases, 7th ed. Houghton-Mifflin. Redeker, Bill. (2006, September 20). “Spies among us? Corporate espionage is big biz. ” Industry Info. ABC News. Retrieved August 23, 2008, from http: //abcnews. go. com/Business/IndustryInfo/Story? id=2468980&page=1. Robbins, S. (2005). Organizational Behavior. Philippines: McGraw-Hill.